Walters Portrayed as a Savvy Investor Who Didn't Need to Cheat

(Bloomberg) -- Professional gambler Billy Walters is trying to show a jury he mastered the stock market by doing his homework -- and didn't need illegal tips to make a windfall.

As the insider-trading trial of one of the most successful sports bettors in the U.S. winds down, Walters's lawyers called a trio of brokers to testify that he's just as adept at playing the odds on Wall Street as he is making wagers in Las Vegas.

“He was a very, very aggressive investor," Rob Miller, of Stifel Nicolaus & Co., told a Manhattan jury Tuesday. “He really, I would say, combined a professional style of gathering research and information with a gambler's trading instinct. He was far and away my most aggressive investor."

Miller said he's known Walters since about 2006, serving as his primary broker since at least 2011. He and two other brokers who handled trades for the gambler described him as a savvy investor who thoroughly researched stocks and would call brokers constantly during the days he put on trades. Retired Wells Fargo Advisors broker Alan Duncan told jurors on Monday he viewed Walters as “the Babe Ruth of Risk." 

The questioning of Miller and Duncan was intended to cast doubt on the government's allegations that Walters, 70, made about $43 million during a six-year period by trading on secret tips provided by former Dean Foods Co. chairman Tom C. Davis. 

‘Virtual Conduit'

Davis, who pleaded guilty and is cooperating with the U.S., testified that he became a "virtual conduit of nonpublic information" to the gambler in part after Walters loaned him almost $1 million to pay off gambling debts and expenses from a bitter divorce.

Miller said Walters often spoke about clues he saw in the market, which he called “tells,” that he said were an indicator of how a stock could move. Walters would also give Miller the odds on a particular stock, he said.

“Sometimes he'd talk to me in gambling parlance,” Miller said. “Oftentimes, he would refer to his investments as ‘bets.'”

Miller testified that Walters, with encouragement from a famous golfer buddy, followed him as a client when he left Goldman Sachs Group Inc. and joined Barclays Plc in mid-2011.

Mickelson, Barclays

“He said Phil Mickelson had great things to say about Barclays," Miller testified. "When  Phil Mickelson was golfing, Barclays was posted on his shirt and hat.”

The broker said he was present during a Barclays-sponsored tournament held in California, where Mickelson introduced Walters to his boss, Hugh "Skip" McGee III, then head of Barclays in the U.S.

Walters often swiftly made decisions to make trades in amounts anywhere from $5 million to $100 million, Miller said.

U.S. District Judge P. Kevin Castel has told lawyers in the case to be prepared to deliver their closing arguments to the jury on Wednesday.

The case is U.S. v. Walters, 16-cr-00338, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Michael Hytha